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Three trends are currently driving the global electricity sector: decarbonization, decentralization and differentiation. Utilities are making significant contributions to mitigate carbon emissions, while a technology revolution is …

Cash scheme boost for EU jobs and small business sector

ONE of the few concrete announcements to emerge from last November’s EU jobs summit was that the EIB would be freeing up about 1 billion ecu to provide start-up and venture capital for the Union’s small business sector.

The move had in fact been agreed five months earlier when Europe’s political leaders meeting in the Netherlands agreed to set up what they called the Amsterdam Special Action Programme (ASAP), a scheme specifically designed to promote economic growth and job creation within the EU.However, the Luxembourg meeting proved a useful opportunity for EIB President Sir Brian Unwin both to report on the success of ASAP and to unveil the schemes’ particular initiatives for small and medium-sized enterprises (SMEs).

While politicians and the European Commission alike have continually heralded SMEs as a major potential source of new jobs within the Union, the sector has traditionally found it very hard to gain access to finance.Europe’s banks tend to be extremely conservative and cautious institutions which have not been keen to provide loans to ‘unknown’ propositions such as small businesses.

Money made available under the Luxembourg package will not be lent directly to business, but will be channelled into national banking systems and passed on to customers.

Many observers argue that the jobs summit may well come to be seen as something of a watershed in the EIB’s development, paving the way for future forays into more risky ventures.

“The bank’s ambitions have changed to reflect political realities. It could really start to come into its own post-Luxembourg,” said one EU financial expert.

Officials at the bank stress that the Luxembourg initiative will only be really useful as part of a wider job-creation strategy at both the EU level and most importantly within the Union’s 15 member states.

“The EIB is aiming at a complex target. We are looking at targeting investment, furthering growth and job creation,” explained one.

The institution’s best estimates suggest that it could be possible to generate 15-20,000 jobs per billion ecu invested. “We are talking about an impact of the level of hundreds of thousands of jobs. What we achieve with the EIB alone will not be significant in terms of Europe’s 18 million unemployed,” added the official.

Apart from the specific money for SMEs unveiled at Luxembourg, the ASAP has also allowed the bank to provide around 2 billion ecu in loans to fund projects in the health and education sectors.

Schemes in nine EU member states have received money, including projects to modernise hospitals in Berlin and Mecklenburg-Vorpommern in Germany and the construction of a new hospital complex in Thessaloníki, Greece. Funds have also been made available for university buildings in Ireland, Portugal and the French overseas département of Reunion.The EIB has also drawn up what it calls ‘tailor-made’ credit lines to finance small-scale health and educational schemes in France, Belgium, the Netherlands, Denmark and Finland.